Bitcoin Forum

I know that Tether has been accused of a lot of things, and BTC price manipulation is definitely among them. However, according to this report, the very issuance of USDT is enough to start a Bitcoin rally, and it happens at least 70% of the time, at that. In fact, the rally from earlier this year supposedly started because of USDT. What are your thoughts on this?

https://www.bloombergquint.com/onweb/bitcoin-gains-correlate-with-tether-issuance-researcher-says

One big problem of USDT or tether is once it is already inside the exchanges. It is already hard to count how many USDT are in motion and its hard to trace that. Just like what happened in the Chinese Exchanges before when they are suspected to have manipulated the price of bitcoin while using USDT in the exchange itself. The problem comes in when the actual amount of USDT that entered inside the exchange is equals to the appearing number on the exchanges. If the number does not coincide then there is a problem on the exchange itself.

Well, they are probably the 2 biggest cryptocurrencies in the world, in my opinion (USDT is the most popular stablecoin, while BTC is the most popular crypto). There is actually more volume in Tether transactions compared to BTC, who would have thought of that? Likely whales that are moving their funds around.

I definitely see possible correlation between the 2 cryptocurrencies, but I'm not a financial wizard so it'll be hard for me to be sure of anything. It's definitely interesting and does provoke a lot of attention actually.

When traders are using USDT to enter and exit Bitcoin that can naturally affect the price movement of the latter, I guess. In many instances, researchers found out possible correlation between these two digital assets but some are saying that this can just be normal and nothing to worry about. I am actually reading this article here  (https://blog.goodaudience.com/bitcoin-tether-manipulation-2976f303cd47)which sheds some light on this issue though this was written early this year. I agree that to some degree, the probability of manipulations can be quite high and though USDT is suspected as a major player there seems no general agreement (at least not yet) on this area.

That actually makes sense.  I'm not sure how many trading pairs there are with Tether but it could be that bitcoin isn't the only coin being traded in a pair with it.  If there are altcoins paired with Tether on multiple exchanges it would make sense that its volume would be greater than that of bitcoin. 

Whales?  Not necessarily.  More likely its just the aggregate trading volume across many exchanges involving Tether.

It isn't clear to me how bitcoin is affected by Tether or any other stable coin other than the fact that the stable coins are used as a proxy for fiat currencies.  It will be interesting to see if bitcoin's price or even its adoption is affected by FB's Libra if it ever gets launched.  That's going to be another stable coin if I'm not mistaken.

In my recent post, I am referring to whales as the manipulative one which is true, but in this scenario, the growing volume of Tether is not most likely just because of them, After doing some small research we can see from the image that Tether is included in 400 exchange, Well maybe more than 400, and I think Tether is really a hype that is going on that push it to $1 USD.

There are real transaction going on and they are making this stable coin moving, But maybe this is just a plan and a scheme going to simply tell people that Stable coins can make it big and that people have chosen Tether to do it, Well this is just my opinion there are people riding the hype and whales are backing them, But I still hate stable coins, and prefer decentralized ones.

https://i.imgur.com/b557S1c.jpg

Given the viability and efficiency of USDT in fast-paced trading scenarios, there's no doubt that it influences the market in terms of trades and swings. Whales would probably pick USDT as a main currency in transferring their funds from one exchange to the other and given its properties, it is actually the best stablecoin to be used in line with bitcoin. USDT has been involved in a lot of speculation regarding manipulative trading and whatnot inside big exchanges, so it's very likely indeed that it affects and influences the price in a huge way.

I think that this report you have posted is just garbage.
It is normal Tether to move up and down Bitcoin, and Bitcoin does the same for Tether.
They are negatively correlated and it doesn't clarify any indicator which specifically can be noticed for that.

Just read the article, and imo it does not contain any concrete fact to back up the speculation that Bitcoin is influenced by the release of Tether coins, it only tells the Hugh percentage of time that it happened, this of course could be a coincidence.
Again there are many factors that affect the price if bitcoins at any particular point in time.

This could be entirely legitimate. When Tether is printed it signifies an equivalent amount of fiat money being wired to Tether/Bitfinex, generally for the purpose of buying crypto. Of course it should drive prices up.

We're not talking about little fish either. Major players like Mike Novogratz moved huge amounts of money through them according to docs filed in the New York case: https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=neWR7TrbmgYhmz/mrk7drA==

Lets use the huge drop in price that happened in the two weeks ago or so. Bitcoin went from $10,000 down to $8,000. During that time, a lot of people wanted to sell their BTC and convert to a stable coin, mostly tether. Because of this, the price of bitcoin was going down and the price of tether was going up.

It has to do with supply and demand. There was a large amount of people that wanted to sell their BTC out of fear and there was not as many people looking to buy BTC as it was dropping. This made the price of tether go up the $1.06 for a brief period of time before dropping back down to the stable $1.00. Tether it a stable coin because it is meant to sit at exactly $1 even. The problem is when the market rushes in either direction it can cause the price of tether to go up, When BTC and other coins are dropping, or it can cause the price of tether to go down, When BTC and other coins are booming.

we can't see how much money is entering coinbase, can we? if we could, we would probably come to the same conclusion about them: "when billions of dollars are pumped into coinbase, the price of bitcoin rises."

it's easy to point fingers at tether because it's issued on public blockchains, but the relationship is exactly the same.

That is just ONE of the problems of Tether, but it's actually not exclusive to usdt. Basically, with any asset deposited into a centralised exchange, it's all down to the system accounting and how it displays that to all users on the front end. One mess up and numbers on front end are wrong and everything becomes haywire for the wallet.

Happens all the time too, so you hear about people trying to withdraw magic numbers that credited them surprise btc. Some drain hot wallets like these. Exploitable bugs is just one risk with centralised exchanges. Add in a centralised asset and the risk is doubled at least!

True, but that #4 rank by market cap ($4.1 billion supply) is hard to ignore. The whole ecosystem is way overexposed to Tether counterparty risk. So many exchanges revolve around USDT liquidity. I feel like they (and Bitfinex) are perpetually one big law enforcement seizure away from cratering the entire ecosystem.

I'm not so concerned about the alleged price manipulation.

I fully agree with you if the price of BTC is influenced by the price of USDT.
a lot of people save their assets in crypto for a new bull run is the safest way to save in USDT, but it's a bit strange for me to not limit the total supply from usdt to make such a large amount of funds why can't it be detected?